Question:
Calculate the amount due if John borrowed a sum of $3200 at 10% simple interest for 4 years.
Correct Answer
$4480
Solution And Explanation
Solution
Given,
Principal (P) = $3200
Rate of Simple Interest (SI) = 10%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% per annum.
Method (1) Using Formula
Calculation of Simple Interest
Formula to Calculate Simple Interest
Simple Interest (SI) = Principal × Rate × Time
Thus, Simple Interest (SI) = $3200 × 10% × 4
= $3200 ×10/100 × 4
= 3200 × 10 × 4/100
= 32000 × 4/100
= 128000/100
= $1280
Thus, Simple Interest = $1280
Calculation of Amount
The total money paid to the lender by a borrower is called the Amount.
In other words, sum of priciple and interest is called the Amount.
Formula to Calculate the Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $1280
= $4480
Thus, Amount to be paid = $4480 Answer
Method (2)
Calculation of Amount when Principal, Rate of Simple Interest and Time are given
Calculation of Amount directly using Principal, SI, and Time
Formula to calculate the Amount
Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)
⇒ A = P + PRT
Here in the question, P = $3200
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 4 years
Thus, Amount (A)
= $3200 + ($3200 × 10% × 4)
= $3200 + ($3200 ×10/100 × 4)
= $3200 + (3200 × 10 × 4/100)
= $3200 + (32000 × 4/100)
= $3200 + (128000/100)
= $3200 + $1280 = $4480
Thus, Amount (A) to be paid = $4480 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3200, the simple interest in 1 year
= 10/100 × 3200
= 10 × 3200/100
= 32000/100 = $320
Thus, simple interest for 1 year = $320
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $320 × 4 = $1280
Thus, Simple Interest (SI) = $1280
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $1280
= $4480
Thus, Amount to be paid = $4480 Answer
Similar Questions
(1) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 3% simple interest?
(2) If Jennifer paid $3640 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $10780 to clear the loan, then find the time period of the loan.
(4) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 3% simple interest?
(5) Elizabeth had to pay $3760.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(6) If Steven paid $5152 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) Calculate the amount due if Robert borrowed a sum of $3100 at 2% simple interest for 4 years.
(8) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7396 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 4% simple interest.
(10) If Sandra paid $4806 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.